Biodiesel and ethanol, despite their surging popularity as transportation fuels, barely put a dent in our use of oil. However, that could change because the biggest well in biofuels has yet to be tapped, i.e., lignocellulose, the woody part of a plant and a potentially abundant source of energy.
Lignocellulose is everywhere—wheat, straw, corn husk, prairie grass, discarded rice, hulls of trees. The trick is developing a means to get the energy out of this abundant resource. Right now that's an expensive process, limited to a handful of pilot plants. The race is on to optimize the technology that can produce biofuels from lignocellulose sources more efficiently. Already several companies and government-funded laboratories have engineered enzymes and microorganisms to optimize lignocellulose degradation and help turn it into fuel.
Bacteria may be used to extract energy out of lignocellulose. Certain bacteria have the genetic basis to produce enzymes able to break down lignocellulose and produce ethanol. Even if an organism is able to efficiently produce ethanol from cellulose at high yields and purity, in order to produce ethanol in large volumes, a manufacturing process and a device must be created to grow and manipulate the bacteria as cellulose is being converted to ethanol. For example, it may be beneficial that the bacteria be cultured under sterile conditions in order to maintain a monoculture. Also, it would be beneficial if the bacteria are grown in the presence of cellulose in order to trigger the production of the cellulose enzymes necessary to break down cellulose into its dimeric (cellobiose) or monomeric (glucose) units. The bacteria also need to be concentrated in order to facilitate the most efficient ethanol production.